As WorldCom Goes, Will Net Also?

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As WorldCom Goes, Will Net Also?

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WorldCom could suck a vast amount of cyberspace into its multibillion-dollar accounting black hole, but experts say it isn't likely that the Internet will implode along with the scandal-ridden telecommunications company.

WorldCom's assets include MCI, the second-largest long-distance service provider, and UUNet, a vast, high-speed network that handles about half of the world's Internet traffic – including about 70 percent of all e-mails sent within the United States and half of all e-mails sent in the world.

Many who wonder how such a vast network can be properly maintained are concerned about the impending death of the Internet if WorldCom goes out of business, according to analysts and other industry observers such as Rob Rosenberger.

"I keep hearing all these weird rumors about WorldCom turning off the Internet when they turn off the lights," Rosenberger said.

Rosenberger coined the term "service provider attacks" when Excite@Home pulled the plug on its Internet service last December. Rosenberger said at the time that Excite had temporarily left millions of computer users without Internet access, a feat that no malicious hacker or virus has been able to duplicate.

But while WorldCom's deepening financial crisis may result in the company declaring bankruptcy, experts said it isn't likely to cause a sudden shutdown of essential communications services.

"U.S. bankruptcy laws allow large firms such as WorldCom to survive long enough to clean up after their party is over," said Nate Vern, a Manhattan bankruptcy attorney. "The plug will not suddenly be pulled on WorldCom customers; it's not in the best interests of millions of customers, the general economy or WorldCom's specific creditors."

WorldCom's long-term survival hinges heavily on the actions of self-professed geek John Sidgmore, who became the company's chief executive two months ago, shortly before WorldCom disclosed that it had improperly inflated its earnings by close to $4 billion.

Previously, Sidgmore had transformed then-tiny UUNet technologies into a major Internet access player, and then sold the company to WorldCom in 1996 for $14 billion.

At a press conference at the National Press Club in Washington on Tuesday, Sidgmore insisted that he didn't "see any significant chance of the UUNet network going dark under any circumstance."

"I am as confident as I can be that customers are not going to wake up and not have service. I really just don't believe that's possible," Sidgmore said.

But Sidgmore also said that keeping WorldCom alive was a matter of national security, because the company's clients include some of the largest agencies of the federal government, including the Defense Department, the State Department and the General Services Administration.

"What happens if WorldCom doesn't survive?" Sidgmore asked.

Defense Secretary Donald Rumsfeld didn't seem overly concerned about that during another press briefing on Tuesday.

"I am not worried about the risk to the Pentagon from a single company having a change in its corporate situation," Rumsfeld said.

The Pentagon and WorldCom's other major customers would have communication contingency plans in place already, according to Anil Patel, a systems administrator who helped rebuild Wall Street communications systems after the 9/11 attacks.

"Anyone who relies on Internet access to do business, whether they are a multibillion-dollar firm or a self-employed freelancer, has to have a secondary account with another service provider," Patel said. "I would strongly suggest that those who have not covered themselves with such an arrangement do so immediately, no matter whether they are WorldCom clients or not. Secondary accounts are as essential as regularly backing up your data."

Internet service providers are also watching the situation. Many major ISPs such as EarthLink and Microsoft's MSN network have partnered with WorldCom to offer services to their users.

But since ISPs can't function without communications access, virtually all of them contract network access through multiple providers.

Some customers said that they aren't concerned that WorldCom will suddenly close off its network, but are worried that service quality could be affected as the company pares staff to the bone in cost-cutting measures.

Approximately 17,000 of WorldCom's 80,000 employees were handed pink slips last Friday, and Sidgmore said there may be further layoffs in the future.

WorldCom official Brad Burns said the company is contacting its customers to reassure them.

"This news has no impact on ability to serve our customers," Burns said.

Most concerned are small and midsize business owners, many of whom said they'd yet to receive a comforting call from WorldCom and in fact are having problems contacting their sales representatives.

"My sales rep was fired last week, and all that's left are sad people who sound like they are reading from a press release," said James Green, owner of a printing firm in Portland, Maine, with 65 employees. "I have to logically assume my business is not WorldCom's primary concern right now. They are going to be wooing their million-dollar customers, not me."

Green said that WorldCom was the major subject of discussion Monday evening at his local Chamber of Commerce meeting.

"Most people with midsize businesses can't afford to wait and see what happens, because we can't afford to pay for secondary just-in-case service," Green said. "We're already shopping for an alternative provider."

New Jersey graphics designer Keith Cummings, president of a free-lance artists' association who contracts with WorldCom for high-speed Internet access, said that he was also examining other options for the collective's connection.

"I called my WorldCom rep, and he said it was just a minor bump in the highway, that they'd be cruising along smoothly again soon," Cummings said. "I was amazed at how blasé he was. Call me old-fashioned, but total financial and ethical collapses tend to make me a little tense."

Attorney Vern said that fleeing clients, not the current financial crisis, could cause the death of WorldCom.

"If everyone takes their ball and goes home, WorldCom's game is over," Vern said. "But the Internet will play on."